Buying and Selling Hay

Many locations in central Minnesota are suffering from severe drought this year. Though we’ve been quite dry, the overall hay production has been quite good in our neck of the woods leaving many farmers with hay to sell. Over the past several weeks, I’ve had several calls from farmers asking how they can help those in the drought stricken areas by offering their excess hay for sale.

When selling hay there are a few things to keep in mind to help make the transaction go smoothly. First of all, it’s important to understand what the buyer wants or needs. Forage quality, hay type, packaging, payment options, transportation costs and delivery requirements are all aspects of a sale that need to be communicated from the buyer to the seller.

The cost of transporting hay is a major consideration when selling into any market and generally, tends to limit the sale of hay to the higher quality, “dairy” hay and perhaps horse hay. With beef hay, transportation costs soon become a cost limiting factor for the buyer.

The dairy industry predominantly prefers alfalfa hay. Legume grass mixtures may also be popular with many dairy farmers, but the quality needs to be equivalent to that of high quality alfalfa.

Relative Forage Value (RFV):
Dairy hay is sold almost exclusively on a quality basis. In fact, it’s nearly impossible to sell dairy quality hay without a forage analysis. Historically, the standard for quality was determined by Relative Forage Value (RFV). With this test, the dairy farmer could predict animal performance and milk production from a given lot of hay and soon became the gold standard for testing hay.

The RFV test, however, has its downfalls. Perhaps the most striking problem is its inability to predict the digestibility of the fiber fraction of forages which underestimates the value of grass forages. With the advent of this test, grasses got a bad rap and unfairly so.

Relative Forage Quality (RFQ):
To overcome this shortcoming, a new test was developed called Relative Forage Quality (RFQ). The RFQ test uses the same numbering system and is meant to have the same meaning as RFV so that RFQ could be easily substituted for RFV without making economic and other management changes. RFQ is a more expensive test, but is appropriate for use with all forages except corn silage because RFQ does not account for differences in starch availability.

In short, if your forage is strictly alfalfa, the RFV test is fine, but if you have mixed hay, the RFQ is a more accurate test. Whenever RFV and RFQ are different, RFQ is the better value to use.

Once you’ve determined your forage quality, how
do you find the buyers?
Selling hay is often a daunting task for those new to selling hay. Many inexperienced hay sellers are used to the grain elevator model in which the farmer delivers a product to the elevator and gets a check. With hay sales, you need to focus your efforts on finding a buyer and delivering a desired product which can have much greater variability than grain products.

Hay brokers are one option that may offer a more palatable alternative for first time hay sellers. Brokers typically find the buyers, arrange for delivery and handle the payments. Or course, there is a fee for this service, so you will have to give up a piece of the pie for that convenience.

Websites are another option. The FSA has historically had a website for this exact purpose, but limits it to buyers that are used to doing business on the Internet. To list your hay for sale, click on the following link:

www.fsa.usda.gov

and click on the “Haynet” link. This option will open markets to the entire country, but remember the transportation rules, cost will limit your practical market distances.

Hay auctions are yet another viable option. Hay auctions are held the First & Third Thursday's from September to the first week in May at the Trucker's Inn in Sauk Centre. When considering this option, don’t forget to factor in your cost of transportation and selling expense which can account for $25 to $40/ton. To see the results of past auctions as well as the first one of this season, check their website: http://www.stearnsdhialab.com/Auct-Hay.htm

Perhaps the most common method in which most everyone will find comfort is newspaper advertising. The Dairy Star newspaper is one source that will likely reach the greatest dairy audience in the State. To reach them, call or write to The Dairy Star, 522 Sinclair Lewis Ave, Sauk Centre, MN 56378 522 Sinclair Lewis Ave, Sauk Centre, MN 56378. Their number is 320- 352-6303. You can also reach them by email: Kristen@saukherald.com

Jim Stordahl, Extension Educator
Polk and Clearwater County